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Stubborn China stuck with HK boss

By CNN's Senior China Analyst Willy Wo-Lap Lam

An effigy of Tung is paraded through the streets of Hong Kong.
An effigy of Tung is paraded through the streets of Hong Kong.

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Thousands of pro-democracy activists in Hong Kong gathered outside the legislature voicing disapproval of their leader.
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Protests against the security law caused Beijing to pull the plug on broadcasts into China.
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Under the proposed legislation -- prior to amendments announced Saturday -- anyone found guilty of acts of treason, sedition, secession or subversion against mainland China could be jailed for life.
Treason: instigation of foreign invasion, assisting a public enemy at war with the People's Republic of China (PRC), or joining foreign armed forces at war with the PRC.
Secession: use of war, force or serious criminal means to split the country.
Subversion: use of war, force or serious criminal means to overthrow or intimidate the Central People's Government, or to disestablish the basic system of the state
Sedition: inciting others to commit treason, subversion or seccession, or inciting others to engage in violent public disorder that would seriously endanger the stability of the PRC.

HONG KONG, China (CNN) -- The Chinese Communist Party (CCP) does not like losers; what it likes even less is admitting having made mistakes.

That is why barring a significant worsening of the political crisis in Hong Kong, Beijing would still be keeping Tung Chee-hwa as the special administrative region's (SAR) Chief Executive at least for a couple more years.

Throwing out Tung now would send out the kind of signals Beijing dislikes most.

Firstly, that the CCP made a bad mistake in picking the chief executive.

Secondly, that the defiant show of people power seen in Hong Kong this month could humble even the world's most potent political party. (Massive protests)

One of the many ironies surrounding Tung, 66, the son of legendary tycoon Tung Chao-Yung, is that from Beijing's perspective, ex-president Jiang Zemin was not exactly off the mark in 1996 when he designated the crew-cut, Shanghai-born businessman as the first SAR supremo.

The stock market was blooming and property prices were going through the roof in anticipation of a near-seamless return of the British-ruled territory to the embrace of the motherland.

All that the leadership was looking for was somebody acceptable to the Hong Kong and international business communities -- and unthinkingly loyal to CCP authorities.

Administrative, political and public relations skills, let alone crisis-management expertise, were not the CV items in which Jiang or other members of his powerful Shanghai Faction were interested.

From the angle of loyalty and patriotism, however, Tung was an ironic choice as he was considered pro-Taiwan until Oriental Overseas Ltd (OOL) -- the mammoth shipping company founded by his father -- ran into major difficulties in the wake of the oil crisis of the 1970s.

Like many other Shanghai-based capitalists, Tung senior fled the mainland before the Communist revolution and he had kept close ties with government leaders and business partners in Taiwan.

When the patriarch passed away in 1982, Tung discovered the company was heavily in debt.

The Liverpool University graduate would later tell friends he spent a few years desperately looking for white knights in Taiwan, Europe, the U.S. -- and Beijing.

A special loan reportedly approved by the Chinese State Council saved OOL from bankruptcy -- and secured Tung's fealty until this day.

Tung was made a member of the Chinese People's Political Consultative Conference in the early 1990s, a sign that he was among a handful of patriotic businessmen being groomed for the post-1997 SAR top job.

After last British Governor Chris Patten tearfully folded up the Union Jack the night of June 30, however, it was one mishap after another for the SAR -- and its beleaguered chief.

Like most countries in the region, the Hong Kong economy took a drubbing from the Asian financial crisis that erupted in the autumn of 1997.

More significantly, with the blossoming of China's open door policy, the center of gravity of the Greater China business universe is shifting to chic, flashy east coast cities such as Shanghai.

Hong Kong is no longer the indispensable gateway to China that it used to be until the mid-1990s.

With manufacturing jobs in Hong Kong having already moved to nearly Guangdong Province in the 1980s and 1990s, services-sector companies, including those run by multinationals, are relocating to Beijing, Shanghai and Guangzhou.

With characteristic indecisiveness, however, Tung was unable to set clear-cut directions for restructuring the economy. (Calls for resignation)

Plans to nurture new areas of growth in IT, herbal medicine or multi-media have failed to gather momentum.

This led Zhu Rongji a few years ago to give a rare public scolding to the Tung team that, in the former premier's words, "spends a lot of time discussing things but never come to a decision; and even after decisions have been made, they are not implemented properly."

By the end of Tung's first term in office in mid-2002, property prices had fallen more than 60%, the economy was stagnating and unemployment rate was around seven per cent.

Misplaced loyalty

Even the heavens seem out of joint, as is evidenced by the onslaught of strange and lethal new diseases such as bird flu and the even more deadly severe acute respiratory syndrome (SARS) epidemic.

What precipitated the 500,000-strong anti-Tung demonstration on July 1, however, was his ill-considered decision to rush through the draconian National Security Bill -- and his stubborn refusal to discipline or fire incompetent and unpopular officials.

In apparently carrying out Beijing's instructions, Tung is keen to enact a law to counter subversion, secession, sedition as well as the "leakage of state secrets" as soon as possible, and in any case, not later than mid-2004.

However, local and international organizations including the Hong Kong Bar Association, Amnesty International, and the U.S. House of Representatives have raised fears that the bill, known as Article 23, will significantly curtail civil, religious and media freedoms.

While never saying no to Beijing, Tung also seems exceedingly loyal to his ministerial-level officials, including Secretary for Security Regina Ip, Secretary for Health E. K. Yeoh, and Financial Secretary Antony Leung.

Ip has incurred widespread ire in the community for refusing to listen to voices of opposition against the anti-subversion law, including protests by popularly elected members of the Legislative Council.

Yeoh is blamed for mishandling the SARS epidemic, and Leung for having bought a Lexus sedan just before the announcement of a new budget -- drafted by himself -- that substantially raised taxes on luxury vehicles.

As barrister and legislator Margaret Ng pointed out,: "Tung has no feel for the political pulse of Hong Kong."

"It is dangerous for such a person to continue leading the SAR," she added.

The Hong Kong Basic Law, or the SAR's constitution has no easy provision for removing a sitting chief executive.

And even if Tung were to fall seriously ill, a re-election -- albeit by an "electoral college" consisting largely of Beijing appointees -- must take place within six months.

With the new Beijing leadership under President Hu Jintao still in the process of consolidating power, however, it is quite unlikely the CCP authorities would be able to settle on another candidate for chief executive any time soon.

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